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Jobs Report Cements Lofty Fed Ambitions
The US economy added 261,000 jobs in October, the government said Friday.
That was far more than ex
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There may be some one off Florida hurricane effects in leisure and hospitality jobs. A nephew lost his at a hotel because it’s not there any more.
Yeah for sure. And I almost wrote that, but then I deleted it at the last minute because BLS said this: “Hurricane Ian had no discernible effect on the national employment and unemployment data for October.”
Of course that’s not very specific, but… who knows.
How does the economy add that many jobs, the participation rate drop, but the unemployment rate rises? I know it is two different surveys, but one of them in for revisions.
Some of it is noise. The Oct ’22 MOM changes in HH survey are not statistically significant. Some of the industry-level MOM changes in Est survey are similarly not stat sig. I look at the monthly results as probabilities rather than accounting numbers.
“The household survey and establishment survey both produce sample-based estimates of
employment, and both have strengths and limitations. The establishment survey employment series
has a smaller margin of error on the measurement of month-to-month change than the household
survey because of its much larger sample size. An over-the-month employment change of about
100,000 is statistically significant in the establishment survey, while the threshold for a statistically
significant change in the household survey is about 500,000. However, the household survey has a
more expansive scope than the establishment survey because it includes self-employed workers
whose businesses are unincorporated, unpaid family workers, agricultural workers, and private
household workers, who are excluded by the establishment survey. The household survey also
provides estimates of employment for demographic groups”
I wonder to what extent monthly or even bi-weekly tax reporting is, or could be, used to augment survey-based economic data.
I noticed that too. It’s a good demonstration of how much noise there is amidst the signal.
I wonder how much larger the underground economy plays a role in this? My own personal experience, (building a large off grid cabin), I have noticed labourers and vendors eager to accept cash and requesting it. My builder currently has a couple guys on his crew off the books, and I’ve doled out tens of thousands in cash for labor, deliveries, and equipment. Electricians, plumbers are all doing the same. Anecdotally, it seems this segment of the economy is MUCH larger than typical. If you can collect unemployment insurance and handouts and work for 30 or 40 dollars cash, your doing pretty well.
No idea if its enough to distort the statistics and explain some of the disparities.